So Far, Pact Just Has China, U.S. Trading Barbs

Richard Pidduck, a lemon grower here, knows all too well the unexpected obstacles that can arise long after the ink has supposedly dried on a deal with China, one of this country’s most problematic trading partners.

“That’s when the rubber really meets the road . . . or doesn’t meet the road,” said Pidduck, a fourth-generation farmer who has 140 acres of lemons and avocados in Ventura County.

Nine months after the U.S. and China signed an agreement to open up that country to U.S. citrus, meat and wheat, a group of Chinese officials finally arrived late last month to inspect California’s citrus groves. The Chinese must approve U.S. pest and disease eradication procedures before those goods can be shipped to China.

In visits to Florida, Texas, Arizona and California, the Chinese have been warmly feted but reminded that if they don’t start placing some orders soon, they will be endangering U.S. efforts to support China’s membership in the World Trade Organization.

“These issues have been dragging on for a long time,” said Isi Siddiqui, special advisor to U.S. Agriculture Secretary Dan Glickman, after a meeting last week with the Chinese delegation in Washington. “They need to make a move.”

Siddiqui told his visitors, only half-jokingly, that he expected their government to open its market for U.S. citrus, beef and wheat by the Chinese New Year, which was Saturday.

But the Chinese claim it is U.S. foot-dragging holding up this show.

“The Chinese government keeps its word,” said Xia Hongming, director general of China’s Department of Supervision of Plants and Animals and the leader of the delegation.

Under normal circumstances, this bureaucratic tit-for-tat would have quite a small audience. After all, the topic is fruit-fly traps and fumigation methods.

But with the Clinton administration facing a fierce battle in Congress over China trade, the status of this particular agreement has become a subject of keen interest in Beijing and Washington.

China’s weak rule of law has resulted in a spotty history of upholding bilateral agreements, notes Greg Mastel, a trade specialist at the New America Foundation, a Washington think tank. For example, the U.S. had problems getting China to comply with pacts signed in 1992 and 1995 aimed at reducing software and CD piracy and at eliminating import barriers.

The citrus, meat and wheat deal is a prelude to a bigger and far more important agreement: China’s accession to the WTO.

Sometime this spring, the Clinton administration hopes to persuade Congress to grant China permanent normal trade relations status, a prerequisite for U.S. firms to be able to benefit from China’s WTO membership. But supporters fear critics will use what is perceived as China’s delays on the agriculture deal as further evidence that China can’t be trusted to uphold its international commitments.

In a recent meeting with Chinese Ambassador Li Zhaoxing, U.S. Sen. Max Baucus (D-Mont.) told him that “Congress is looking for direct action and concrete steps that translate into actual purchase of U.S. products prior to the [normal trade status] vote,” according to a Baucus aide. Without it, the aide said, approval will “become much more difficult.”

To reassure China’s critics, Baucus plans to introduce legislation that would establish a system within Congress to monitor China’s adherence to future trade agreements.

The agreement reached last year would let citrus, wheat and meat into China, but the products would still be subject to tariffs as high as 70%.

The broader WTO deal would do much more for those crops and others by sharply reducing such tariffs, raising quotas and opening up the distribution system that has been a bottleneck for foreign firms.

Last year, for example, China imported less than a million metric tons of wheat from abroad at a tariff rate of about 70%. It has agreed that once it joins the WTO, it will import up to 7.3 million metric tons of wheat at a 1% tariff.

Sunkist Growers, the Van Nuys-based citrus cooperative, predicts that China could be a $500-million market for California citrus over the next five years if the U.S. supports a China WTO deal. That deal calls for reducing citrus tariffs to 12% from 40% over a three-year period.

But California’s citrus growers aren’t ready to celebrate, having been caught before in the volatile U.S.-China relationship.

The narrower U.S.-China agreement on citrus, meat and wheat was originally signed--and celebrated--last April during Chinese Premier Zhu Rongji’s visit to the U.S. But the mood quickly soured after Zhu was forced to return to China empty-handed when President Clinton wouldn’t accept his offer for a WTO deal.

Then a series of diplomatic misfires sent U.S.-China relations into the deep freeze. There was grumbling in Washington over the failed WTO talks, the NATO bombing of the Chinese embassy in Belgrade and accusations of Chinese espionage in the U.S.

As tensions mounted, the agriculture deal began unraveling. China insisted the agreement could not be truly consummated until the two sides signed a Chinese-language version.

Agriculture Secretary Glickman and his Chinese counterpart managed to ink the pact again in November, on the sidelines of the now-infamous WTO meeting in Seattle.

But again confusion reigned. U.S. farm groups were told the deal was finalized, but senior Chinese officials said they wouldn’t act on it until Congress approved normal trade status for China.

U.S. officials have been heartened by the arrival of the Chinese citrus delegation. Siddiqui, the U.S. agriculture advisor, expressed hope the Chinese would be purchasing citrus “in the next few weeks to months.”

During his recent visit to a 150-acre Ventura County orange grove, China’s Xia said he was impressed with the U.S. pest and fumigation procedures but that he needed to review his group’s findings before making a final decision.

Xia bristled at the notion that his government should move faster to appease critics in Washington. He said it is the United States that has slowed the process by failing to supply his office with the correct documents and by not moving forward on programs involving training for Chinese veterinarians and plant quarantine specialists.

“We have many cooperative programs the U.S. side hasn’t begun to implement, hasn’t even contacted China,” he said. “The U.S. should start as quickly as possible.”

Siddiqui disagreed. He said the U.S. had sent a senior agriculture officer to Beijing two weeks ago to discuss those programs and that it is committed to moving forward.

“Those things will take time,” he said.